Husteel Co. v. United States

517 F.Supp.3d 1342

HUSTEEL CO., LTD., Plaintiff,andSeAH Steel Corporation, Hyundai Steel Company, and NEXTEEL Co., Ltd., Consolidated Plaintiffs,

v. UNITED STATES, Defendant,andWheatland Tube Company, Defendant-Intervenor.

Slip Op. 21-51

Consol. Ct. No. 19-00107

United States Court of International Trade.

May 3, 2021

Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S. Hodgins, Eugene Degnan, Edward J. Thomas, III, Jordan L. Fleischer, and Nicholas C. Duffey, Morris, Manning & Martin LLP, of Washington, D.C., for Plaintiff Husteel Co., Ltd.

Jeffrey M. Winton and Amrietha Nellan, Winton & Chapman PLLC, of Washington, D.C., for Consolidated Plaintiff SeAH Steel Corporation.

Robert G. Gosselink and Jarrod M. Goldfeder, Trade Pacific PLLC, of Washington, D.C., for Consolidated Plaintiff Hyundai Steel Company.

J. David Park, Henry D. Almond, Daniel R. Wilson, Leslie C. Bailey, and Kang Woo Lee, Arnold & Porter Kaye Scholer LLP, of Washington, D.C., for Consolidated Plaintiff NEXTEEL Co., Ltd.

Patricia M. McCarthy, Assistant Director, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, of Washington, D.C., for Defendant United States. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Elio Gonzalez, Senior Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade Enforcement & Compliance.

Roger B. Schagrin, Elizabeth J. Drake, and Christopher T. Cloutier, Schagrin Associates, of Washington, D.C., for Defendant-Intervenor Wheatland Tube Company.

OPINION AND ORDER

Choe-Groves, Judge:

Plaintiff Husteel Co., Ltd. ("Husteel") and Consolidated Plaintiffs SeAH Steel Corporation ("SeAH"), Hyundai Steel Company ("Hyundai Steel"), and NEXTEEL Co., Ltd. ("NEXTEEL"), (collectively, "Plaintiffs"), filed this consolidated action challenging the final results published by the U.S. Department of Commerce ("Commerce") in the 2016–2017 administrative review of the antidumping duty order on circular welded non-alloy steel pipe ("CWP") from the Republic of Korea ("Korea"). See Circular Welded Non-Alloy Steel Pipe From the Republic of Korea ("Final Results"), 84 Fed. Reg. 26,401 (Dep't Commerce June 6, 2019) (final results of admin. review; 2016–2017);¹ see also Issues and Decision Mem. for the Final Results of the 2016–2017 Admin. Review of the Antidumping Duty Order on Circular Welded Non-Alloy Steel Pipe from the Republic of Korea, PD 173 (May 30, 2019) ("Final IDM"). Before the court are the Final Results of Redetermination Pursuant to Court Order, ECF Nos. 47-1, 48-1 ("Remand Results"), which the court ordered in Husteel Co. v. United States ("Husteel I"), 44 CIT ––––, 476 F. Supp. 3d 1363 (2020), and Defendant's Motion for Partial Voluntary Remand, ECF No. 56 ("Defendant's Motion" or "Def. Mot.").

Plaintiffs assert that the facts and Commerce's analysis and explanations on remand with respect to its particular market situation determinations and adjustments are essentially identical to those in its remand results in the 2016–2017 administrative review of the antidumping duty order covering circular welded carbon steel pipes and tubes from Thailand, and urge the court to follow its decision in Saha Thai Steel Pipe Public Co. v. United States ("Saha Thai II"), 44 CIT ––––, 487 F. Supp. 3d 1323 (2020) (remanding the remand results in the 2016–2017 administrative review of the antidumping duty order covering circular welded carbon steel pipes and tubes from Thailand). See Pl. Husteel Co., Ltd.’s Comments Redetermination Pursuant Ct. Remand Order at 2–6, ECF No. 51 ("Husteel Cmts."); Comments Consol. Pl., Hyundai Steel Company, Commerce's Remand Redetermination at 4–7, ECF No. 52 ("Hyundai Cmts."); Comments SeAH Steel Corporation Commerce's Dec. 17, 2020, Redetermination at 4–6, ECF No. 53 ("SeAH Cmts."); Remand Comments Consol. Pl. NEXTEEL Co., Ltd. at 1–2, ECF No. 54 ("NEXTEEL Cmts.").² Hyundai Steel contends that Commerce's decision to base normal value on constructed value is contrary to the law because Commerce did not explain under 19 U.S.C. § 1677(15)(C) how a "particular market situation prevents a proper comparison [of] the export price or constructed export price" with normal value based on home market sales, or determine under 19 U.S.C. § 1677b(a)(4) that "the normal value of the subject merchandise cannot be determined." Hyundai Cmts. at 9–12; see also Husteel Cmts. at 5–6. Hyundai Steel argues that on remand Commerce made a "sales-based" particular market situation determination (rather than a "cost-based" particular market situation determination as Commerce had made in the Final Results ), despite the fact that no party made a market viability allegation and interested parties were not given the opportunity to respond pursuant to 19 C.F.R. § 351.301(c)(2). Hyundai Cmts. at 8–9. Defendant-Intervenor Wheatland Tube Company ("Wheatland") did not file comments.

On March 12, 2021, Defendant United States ("Defendant") filed Defendant's Motion, requesting that the court remand partially the Remand Results for Commerce "to reconsider its approach of basing normal value on constructed value and making certain particular market situation adjustments to the respondents’ costs when calculating constructed value" "in light of Saha Thai II ." Def. Mot. at 6, 5. Defendant asks the court to sustain Commerce's determination on remand that Hyundai Steel and Hyundai Steel (Pipe Division) are the same legal entity. Def.’s Resp. Comments Remand Redetermination at 2, 4, ECF No. 57.

For the following reasons, the court sustains in part and remands in part the Remand Results.

ISSUES PRESENTED

The court reviews the following issues:

1. Whether remand is warranted on the particular market situation issue; and

2. Whether Commerce's treatment of Hyundai Steel and Hyundai Steel (Pipe Division) as a single entity is supported by substantial evidence.

BACKGROUND

The court presumes familiarity with the facts and procedural history as set forth in its prior opinion and recounts the facts relevant to the court's review of the Remand Results. See Husteel I, 44 CIT at ––––, 476 F. Supp. 3d at 1367–68.

In its request for review, Wheatland included Hyundai Steel (Pipe Division) in its list of proposed respondents and did not separately include Hyundai Steel. Wheatland's Req. for Admin. Review at 3, PD 4 (Nov. 30, 2017) ("Wheatland's Request for Administrative Review" or "Wheatland Req."). Hyundai Steel and Hyundai Steel (Pipe Division) were identified separately in the Initiation of Antidumping and Countervailing Duty Administrative Reviews ("Initiation Notice"), 83 Fed. Reg. 1329, 1331 (Dep't Commerce Jan. 11, 2018).

In the Final Results, Commerce assigned weighted-average dumping rates of 10.91% for Husteel, 8.14% for Hyundai Steel, and the all-others rate of 9.53% for NEXTEEL and Hyundai Steel (Pipe Division). Final Results, 84 Fed. Reg. at 26,402. Commerce determined that a particular market situation existed in Korea that distorted the cost of production of CWP based on the cumulative impact of four factors, namely: (1) Korean subsidies of hot-rolled steel coil; (2) Korean imports of hot-rolled steel coil from China; (3) strategic alliances between Korean hot-rolled steel coil producers and Korean CWP producers; and (4) distortions in the Korean electricity market. Final IDM at 6, 12–14. Commerce applied an upward adjustment to the cost of production for purposes of the sales-below-cost test based on subsidy rates of hot-rolled steel coil from POSCO v. United States, 43 CIT ––––, 378 F. Supp. 3d 1348 (2019). See Final IDM at 5, 18 (citing Certain Hot-Rolled Steel Flat Products From the Republic of Korea, 81 Fed. Reg. 53,439 (Dep't Commerce Aug. 12, 2016) (countervailing duty investigation final affirmative determination), amended by 81 Fed. Reg. 67,960 (Dep't Commerce Oct. 3, 2016) ). Commerce conducted a sales-below-cost test and disregarded certain below-cost home market sales. See Decision Mem. for the Prelim. Results of Antidumping Duty Admin. Review: Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: 2016–2017 at 21, PD 135 (Dec. 3, 2018) ("Prelim. DM"); Final IDM at 3 (noting that Commerce used the same calculation methodology for the Final Results as explained in the Prelim. DM). Commerce calculated normal value from the remaining above-cost home market sales for mandatory respondents Hyundai Steel and Husteel. Prelim. DM at 21.

The court remanded the Final Results in Husteel I, concluding that Commerce's adjustment to the cost of production for purposes of the sales-below-cost test pursuant to 19 U.S.C. § 1677b(b)(1) and Commerce's cost-based particular market situation determination under 19 U.S.C. § 1677b(e) were not in accordance with the law because 19 U.S.C. § 1677b(e) applies only when Commerce bases normal value on constructed value. Husteel I, 44 CIT at ––––, 476 F. Supp. 3d at 1373–74, 1377.

Commerce filed the Remand Results on December 17, 2020 under protest. Remand Results at 1, 6. Commerce maintained its determination that a particular market situation distorted the cost of production. Id. at 7–8. Commerce did not conduct the sales-below-cost test because, it explained, the sales-below-cost test would not be "meaningful" without an adjustment to the cost of production to account for the particular market situation. Id. at 7. Instead, Commerce made a particular market situation determination under 19 U.S.C. § 1677(15)(C), stating that the distorted cost of production prevented a proper comparison between home market sales and export prices. Id. "[A]bsent the ability to determine whether the comparison market sales were made within the ordinary course of trade," on remand Commerce based normal value on constructed value under 19 U.S.C. § 1677b(a)(4) for each respondent. Id. at 7, 9. In calculating constructed value, Commerce made a cost-based particular market situation...